STATE OF NEW YORK
SUPREME COURT : COUNTY OF CHAUTAUQUA
In the Matter of the Application of
NATIONAL GRANGE MUTUAL INSURANCE COMPANY,
Petitioner, Index #H-10862
For a Judgment Staying the Arbitration
Commenced by JOHN W. KNIGHT,
BURKE, GROSSMAN, VALENTI
& RZEPLA (Thomas J.
Rzepka, Esq. of Counsel)
ERICKSON, WEBB & SCOLTON
(Paul V. Webb, Jr., Esq.
of Counsel) for Respondent
DECISION and ORDER
By DECISION and ORDER of March 8, 1995, on petitioner's
motion for a stay of respondent's demand for arbitration
before the American Arbitration Association, the Court
directed that a trial be scheduled pursuant to CPLR 2218.
The Court held a trial on the question whether, and
when, respondent received the endorsement mandated by the
State for new and renewal policies providing that disputes
would be resolved by arbitration through the American
Arbitration Association. Respondent claimed he had received
the endorsement prior to his accident.
At the hearing the court broadened the scope of the
inquiry and permitted both parties to present evidence and
argument regarding the history and implementation of the
The Court also permitted testimony and argument on the
liberalization clause of the policy which provides as
"If the company revises this policy form with
respect to policy provisions, endorsements or
rules by which the lnsurance hereunder could
be extended or broadened without additional
premium charge, such insurance as is afforded
hereunder shall be so extended or broadened
effective immediately upon approval of such
revision during the policy period by the
appropriate insurance supervisory authority."
Respondent failed to meet his burden of proof that he
received the endorsement prior to the accident. His
responses to questions were that he believed he got it in the
fall of 1993; he believes he received it before his accident;
that he did not bring his file with him; that he doesn't have
the envelope the endorsement came in; that he may have thrown
it away after he saw his attorney.
The testimony of his insurance agent was not helpful;
she did not substantiate his contention. She testified that
she did not receive any "SUM" endorsement for Mr. Knight's
policy between May 6, 1993 and May 6, 1994; and that she
could not tell what the uninsured or underinsured endorsement
was; that she could not match up Respondent's exhibit 2 with
Respondents 4; that the agent did receive Respondent's
Owen Stehle, policy service manager for National Grange
Insurance Company testified that notices are sent out by
computer; that there is no record of any endorsements having
been sent to Respondent until his policy was renewed several
months after the accident.
Had respondent received the endorsement prior to the
accident there would be no question of its applicability to
the accident in question.
Respondent's proof having failed to establish by a
preponderance of the credible evidence that he received the
endorsement before his accident, the Court must now address
the issue of whether the liberalization clause had the effect
of making the new endorsement part of respondent's
policy. The Court holds that it has that effect.
This conclusion is supported by Part F of the policy
entitled GENERAL PROVISIONS, under the subparagraph entitled
CHANGE, which states as follows:
"We may revise this policy form to provide more
coverage without additional premium charge. If we
do this your policy will automatically provide the
additional coverage as of the date of the revision
is effective in your state."
It has long been held that where there is a question of
interpretation of an insurance policy, or when the policy is
unclear, the interpretation will be construed against the
authors of the policy, the insurance company.
The Court hereby declares that the unified
SUPPLEMENTARY UNINSURED MOTORIST ENDORSEMENT - NEW YORK,
"SUM" endorsement number PP 04-09-10-93 containing provisions
for arbitration to the American Arbitration Association was
part of John W. Knight's policy effective October 1, 1993,
and that arbitration should proceed post haste.
Petitioner's motion for a stay of the Demand for
Arbitration through the American Arbitration Association is
denied, without costs, and that arbitration be scheduled
THIS IS THE DECISION, JUDGMENT and the ORDER of this
Court; no further judgment or order shall be necessary.
Dated: June 2, 1995
Mayville, New York
Justice of Supreme Court